Contravention of Section 8(1) of the Foreign Exchange Regulation ...

Foreign national's funds in Indian accounts confiscated due to tax evasion.

Case Laws     FEMA

September 3, 2024

Contravention of Section 8(1) of the Foreign Exchange Regulation Act (FERA) and the confiscation of accrued interest to the Government of India's account u/s 63. The Adjudicating Authority analyzed evidence and concluded that the Appellant did not own the funds in the Indian bank accounts. The Malaysian Inland Revenue Board's report indicated the Appellant and her husband failed to report income from Singapore, UAE, or remittances to India. The proceedings before the Income Tax authorities were to determine the tax liability of a resident abroad and did not impact the acquisition of funds by a resident in India in the Appellant's name. Statements u/s 40 of FERA revealed cash deposits in the bank. The evidence did not corroborate the Appellant's contention about the source of funds. The funds mobilized in R. Susila's name benefited N. Sasikala. The discharge in the prosecution proceedings is independent from the adjudication proceedings, as held by the Supreme Court. The Appellate Tribunal unable to persuade that the prosecution proceedings should have a binding effect on the present adjudication proceedings.

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